Is it ridiculous for me to offer 160,000 on a house listed for 195,000? ?

Nop! you have the right to express yourself.
Who knows, you can get it bcuz it's meant for you!

yes...the owners will be insulted and may not consider your counter offer.

they can only say no they maybe mad as well and no longer want to deal with you no matter any other offer you make

did you offer to buy or to sell?
if you offer to buy then it's ok. cause later then will tell you much they r looking at and how low they can come down. But if you r selling then it is a big mistake. even if your property doesn't look that good always put it on par with local market. Then it will show ur property has a value.

no not at all i bought a house for 130,000.00 they where asking 162,000.00 found out later they bought the house in the 70s for $19000.00 so if you pull the records whats owned on the house you can do okay on the web go to your county tax site pull up the address in will give more info

If you don't ask, you don't get. Lots of real estate all over the place is over-priced. Even if this is not, the owner won't accept a higher offer from you and come back and reward you with a lower price. If it seems like a good offer to you, try it. Always start lower and be prepared to go a bit higher. Just only ever pay what is within your means and what you think its worth. Try not to "fall in love" and over pay.

Good article when you want to put in bid, negotiation.
http://biz.yahoo.com/brn/060909/19463.html

How to value a property during market downturn?

Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don't need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.

Let's use following example:

Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.

If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.

In our example, the two bedrooms condo/townhouse is 20% to 25% overpriced. They should be priced at $400,000.

It is interesting to note that if we redo the calculation from buyer's perspective instead of seller's perspective, the figures are even more shocking.

Mortgage payment consists of two parts: mortgage interests and mortgage principal. The interests portion is similar to rent. If you pay interest, it disappears and doesn't add equity to the property. To fully simulate characteristics of renting, we assume buyer will apply for a zero down, interest-only loan.

It turns out that rent of $2000/month is equivelant to mortgage payment of a $340,000 loan at 7.0% APR. And comparing $340,000 loan to $500,000 or $550,000 price tag, from buyer's view, the two bedrooms condo/townhouse is 30% to 35% overpriced.

One may ask, why is there a discrepancy between two perspectives of the buyer and owner?

The discrepancy is a result of 2% differences in interest rate that buyer borrow comparing to yields of bonds and CDs that owners would get. We understand that buyer would always pay more. That is the premium of buying to own. However, looking from home owner's perspective, current housing market is probably 20% to 25% overpriced. We recommand investors to wait for a better entry point.

you probably wont get the house for 160,000

It wouldn't hurt but don't cry when they laugh at your offer.

it is ok. you never know maybe no one took to their asking price and offers came in at 150k or lower.

No, it's certainly not ridiculous. If that is the property's value to you, it would be ridiculous to offer more.

So, let me ask you one question? Are you looking to purchase a home....

OR A DEAL?

If you simply state the reason for your offer is that it's the most you can afford, they shouldn't take offense. Let them know that you love the house but in all honesty the asking price is too high for your budget. They have two options... to accept your offer or decline it. What do you have to lose??? I do believe you may be wasting your time, the seller's time, and the real estate agent's time if you are simply looking to find properties that you kow you cannot afford or are just trying to find some insane bargain properties.

not really, as long as you front a higher earnest money to show them that you are not playing around. besides, it's just an offer, they can always counter your offer.

They might be a little offended, but if you have done comparisons in the neighborhood and have checkedout the house thoroughly and found problems that have to be fixed then I would say "NO". What they ask and what you're willing to pay can be two different things and maybe you can come to a compromise with them if this is what you want.

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